Why Track Your Assets, Liabilities, And Cash Flow?

I frequently mention the importance of communicating with the “self” and understanding the “self” for the sake of personal development. Tracking your assets, liabilities, and cash flow is the equivalent for your personal finance. It is also imperative for solving your money problems and solving your money problems.

When you want to find out the health of a company, a division in a company, a deli at the street corner, or any other business, what do you do?

Interview their executives? No.
Simply observe their customer flow? No.
Based on reputation? No.

Ok, I know you are not that stupid.
You will look at their:
– balance sheet for total outstanding assets, long-termand liabilities, and short-term liabilities
– cash flow for revenue, fixed operation cost, variable cost, and essentially, profit.

If you want to know the health of your financial situation, you have to keep track of the same thing.
To improve your financial situation, or to simply GET RICHER, you have to understand those same parameters for yourself.
Hence, the need to track your assets, liabilities, and cash flow.

If for nothing else, you should at least know your expense and income in order to spend less than you earn, which is the most basic thing in personal finance everyone should be doing, in order to NOT go brankrupt!

You don’t have to keep track of every nickel and dime, unless you want to.

There are softwares out there that can assit you in doing this AceMoney, Microsoft Money, Quicken… convenience includes allowing you to import a file with all the transactions in the month from your online credit card account into the software. It really only takes 5-10 minutes each week if you perform updates weekly.

Otherwise, you can simply keep a spread sheet of the balance of all your saving/loan accounts and major assets, updated on a monthly basis. With the total balance showing monthly, you can compare and see which direction your finance is heading… either be up or down!

The most significant thing that I’d say about this is that it will at least keep you above negative or from going bankrupt, even if you are too lazy to implement any concrete strategy to improve.


Because when you actually SEE your total balance in real, concrete numbers and it is going downward and perhaps, in the negative, in RED… I’m quite sure 99.99% of you can no longer deny the fact and notice that something’s wrong and something must be changed. Hopefully before you can no longer pay all your bills.

Versus just having one of these thoughts in your head, “Darn, I’m poor”, “Hmmm, I’m spending too much”, “Oh, I think I don’t have enough money”.

That is in equivalence to something I always think –
That if wars are still fought with knives and swords, spears and halberts, people would be much less willing to kill because they’ll actually feel the refuting sensation every time weapon enters the flesh of another fellow human’s body.

Seeing the numbers is kind of the same thing.
You feel the stings and blows every time you see your total balance decreasing.
Worse yet, in the red.

On a personl note, tracking of my expense is telling me that I am spending quite a bit lately, which is okay because I’m still spending below my income and it’s money worth-while to make myself and others around me happy. However, I am reminded that I should buckle down a little.

Originally posted 2007-08-29 23:34:26. Republished by Blog Post Promoter

Subprime Mortgage Crisis? Student Loan Crisis?

MSNBC has this article: Pricey student loans sow seeds of trouble.

While scholarship, grant money and government-backed student loans — whose interest rates are capped — have taken up some of the slack, many families and individual students have turned to private loans, which carry fees and interest rates that are often variable and up to 20 percent.

Consumer prices on average rose less than 29 percent over the past 10 years while tuition, fees, and room and board at four-year public colleges and universities soared 79 percent to $12,796 a year and 65 percent to $30,367 a year at private institutions, according to the College Board.

Meanwhile, complaints about marketing of private loans — like ads promising to approve loans worth $50,000 in just minutes — are on the rise. The complaints have made their way to lawmakers, who see a need to regulate the highly profitable and diverse group of companies and the loans they make to college students.

In other words, available government loans is not able to keep up with the increase in student tuition in the past years, forcing students to turn to private loans that have some very hefty interest rates.

“College students, you need a large sum of money for school? And have little to no credit? No problem! We will still give you the loan. (But we will take back a lot more from you later, in the form of interests, yeah!!)”

Wait…have I heard this before? I think this sounds similar to what they did in the subprime mortgage sector. Not only will students carry a bigger amount of debt out of college, they will also carry those debt at a much higher interest rate. This will clearly bring their monthly loan payment to double, triple, quadruple… than what their previous generations had to pay. And since I doubt future salary can increase at such a joyous rate, this gives birth to the question on how the future generation can afford their loan payments graduating from college. If they cannot afford them, they are going to start to default… oh crap…

And wait…have I heard this before? I think this also sounds similar to what’s going on in the subprime mortgage.

Despite this being pure speculation that I draw and agree with such a comparison from the article, I really wonder what are these people thinking? Is making instant or quick money all they care about now?

In short-term definitely, they will reap some heavy profits with the high interest rate, and probably packaging these loans to sell as collaterals also.

Now in long-term, I don’t know if it looks so good anymore, and I would say worse than what may happen in the mortgage sector because the people they screw over this time will be the whole future generation. Not only will all the investment and hedge-funds base on these student loans crash. These are the people who will be future consumers, the entire or majority of the population, unlike the subprime population that makes up a much smaller percentage.

So what these private loan companies will end up doing is crippling the future population’s spending power with these loans and probably destorying a good portion’s credits. Without spending power and credits, they can’t buy houses, they can’t buy services, they can’t buy consumer goods… Let’s see such a economy will work out then.

Again this is pure speculation and albeit pessimistic, I can’t help but see the resembling occurrence between the student loans and subprime mortgage. It seems like these people are just moving sector to sector aiming only to make a quick buck and to get instant gratification with no caring about other people’s lives. Where is their sense of decency and compassion? I don’t see any. They are now targeting 17-20 years old with little life experience and will probably make their life experience a sad and painful one before they have a chance to start it. I would rather live poor than having to sell my children’s life away like that, but actually in my standard, I would consider myself living rich the way I choose to live.

I sure hope they are ready for such a future.

Originally posted 2007-10-03 01:47:08. Republished by Blog Post Promoter

Sensory Stimulated to Feel Alive in the Rat Race

Current culture is about consumption.


What is consumerism about? Instant gratification. And what is it that we wanted to be instantly gratified…? Sensory stimulation.

But why sensory stimulation? Perhaps it is about our need to FEEL alive (feeling happy and excited is another way of expressing it), as if we are not alive already. Now has gotten to the point where we are constantly stimulated, as if we need to always live in an OMG(oh-my-god) state of mind, be it good or bad.

All current trends that people so desperate seek after these days resolve to the same end — sensory stimulation. Fashion, TV, video games, social networking, extravagent food, traveling, drugs, sex, whatever new “technology” we try to create, and even activisms to “save the world” inevitably have more to do to drive/cater/create need to be sensory stimulated than anything else. I am not condemning them and please read on.

Again, it has to do with us wanting to feel alive… when we are already alive. But when we over do a process that is natural of itself, we bring chaos and more troubles than necessary.

Try too hard to do something, mark my word, you will fail.
Try too hard to shoot a basketball, you will miss.
Try too hard to play the piano, you will sound like shit.

That is why if you know yourself, you know you are alive at this moment. You can simply live. You can embrace all your desires that will never become excessive and thus no need to repress them… desires that companies’ marketers and advertisiers so desperately want to instigate, with the sole intention to cause us to consume more.

The idea is not to be able to feel awe and wonder in the presence of extraordinary things. The idea is to be able to feel awe and wonder in the simplest things in life.

Perhaps to make a broad general statement.
It is not about living an extraordinary life
It is not about living a simple life
It is about living a simple life extraordinarily.

Then if you occasionally seek after more stimulating experience (and perhaps even over do it a bit), it’s absolutely alright and acceptable, and you definitely will not be addicted. You will not NEED to consume more and more, and thus spend so much money, and thus trade your time for more money… and consequently and inevitably be forever in the so-called rat race.

In the end, it still goes back to knowing yourself, which lead to a simple life. Be mindful it is not the other way… forcing yourself to have a simple life will never work, nor does repressing desires.

Originally posted 2010-11-30 15:56:12. Republished by Blog Post Promoter

Damn Snow Flakes

Mind you, I am not talking about real snow. I am talking about all the DHTML snowflakes that many websites and blogs are having for the Christmas season.

Why am I cursing?

Because every time I go to one of these sites, I can see my CPUs (Core 2 T7200 2.0GHz) going from idle to 25% usage — meaning half of one CPU. Yes, I am a big geek with a CPU monitor on my desktop.

Even though modern machines have plenty of computing power to generate these effects without slowing down. But think about millions of people around the world visiting these websites, increasing CPU power consumption. What wastefulness! And they are not even pretty but distraction against the text I want to read. Let alone some people have the fake white snowflakes against white background?

Let alone the power we are already spending on lightings and shit.

Oh, what harmful nature of ignorance and unawareness, albeit unintended.

Ok, done with my rant for the day.

Originally posted 2009-12-22 17:57:24. Republished by Blog Post Promoter

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